Service King Opens Talks With Creditors

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March 1, 2022—According to a story by The Wall Street Journal Service King has opened talks with creditors about restructuring the company’s debt, with a Chapter 11 bankruptcy filing among the possibilities. Lenders who are a part of the $775 million term loan have signed nondisclosure agreements with the company to begin negotiations ahead of a July debt maturity date.

The story notes that Service King had projected earnings of around $125 million for 2021 when it refinanced some of its debt last January, but it ended up losing money over that period.

The company recently announced the hiring of former airline executive Peter Hunt as its new CFO. In announcing his hiring, Service King CEO David Cush said in a statement, “Having worked closely alongside Peter for seven years at Virgin America, I’m confident that his extensive experience will drive Service King’s success and give our organization some new tools in its toolbox.”

According to the story, the “vast majority” of Service King’s revenue comes from its agreements with national and major insurance carriers, according to Moody’s Investors Service. Bloomberg recently reported Service King had $31 million in cash as of the third quarter, after drawing $72 million on its revolving credit facility and hitting its borrowing limit.

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